FIs at a Crossroads: Build or Buy Mobile Payment Apps?

Commerce has evolved over the 10,000-plus-year history of society. The Internet age introduced online banking 20 years ago and now 80 percent of bank customers in the developed world are online.

In addition, in the span of the past four years or so, mobile banking has grown to 52 percent of smartphone owners. And now, mobile payment applications have taken the market by storm and are the hottest topic in commerce today.

Today, most bank and major card issuers are at a crossroads and asking themselves whether they should launch a standalone payment app or add mobile HCE payment capabilities to an existing bank-branded app. Although this integration might not mean instant success for mobile payments, it does offer some indication as to how mobile payments are evolving.

In the midst of all this mobile banking hoopla, some of the banks are contemplating whether they have to participate in third-party wallets such as Apple Pay, Android Pay, Samsung Pay and CurrentC.

FIs continue to evaluate the most appropriate approach for offering mobile apps and other capabilities for their customers and members. For some, their access to internal resources with the right skill sets and availability are limited (if even available), creating significant challenges for their institutions. This is why many FIs are increasing their partnerships with their core, channels, and other fintech vendors to bring their mobile solutions to market more quickly and reliably.

Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group